The US supreme court has raised the bar on the consideration of race in the college admissions process, sending a seminal challenge to the University of Texas's diversity policy back to the lower appeals court and instructing the judges to consider the case again under a tougher burden.

The ruling does not abolish the practice of affirmative action, as its supporters had feared. The policy has helped to shape the landscape of diversity within higher education for 35 years, and has become an growing bugbear of the conservative right that sees it as a form of discrimination against white students.

But the judgment, delivered by Justice Anthony Kennedy on a seven-to-one vote with justice Elena Kagan recusing herself from the decision, does raise the hurdle that universities must jump if they are to convince the courts that their use of weighting in favour of racial groups is constitutional. The ruling says that a "strict scrutiny" must be applied to any admissions policy.

Under the judgment, the university can still apply an admissions programme with a racial component, but it will now have to convince the lower appeal court in a renewed hearing that it meets the "strict scrutiny" criterion. To do that, the management will have to show that the programme was narrowly tailored specifically to attain diversity, and satisfy the court that "no workable race-neutral alternatives would produce the educational benefits of diversity".

In future, courts will no longer be able to give universities the benefit of the doubt in trusting that their admissions procedures were justifiable. The supreme court ruled that US court of appeals for the fifth circuit was wrong to assume the University of Texas's decision "was made in good faith" – it should have closely examined how the process worked in practice and made its own assessment.

The appeals court will now have to reconsider the case and judge the university's admissions programme "under a correct analysis".

As the nuanced nature of the judgment began to be digested, both sides in an increasingly charged debate over affirmative action claimed victory. Benjamin Todd Jealous, president of the NAACP, said that though the supreme court stopped short of issuing total backing for the university, "this is a very good outcome".

Jealous said that the seven majority justices had been very clear that there was a role for race in the admissions policies of public universities. He predicted that when the appeals court came to reconsider the Fisher case, as it must now do, "it will not be difficult to prove a need to fight against the legacy of racial discrimination in states like Texas".

The NAACP chief added that race played only a small part in the University of Texas administration's process. Some 75% of all incoming students are drawn from the top 10% of achievers from all the state's public schools who have automatic right of a place irrespective of any other factor.

Of the remaining quarter of places, Jealous said, "a number of factors are taken into account, of which race is only one."

Roger Clegg, president of the Center for Equal Opportunity that filed a brief with the supreme court arguing that affirmative action should be deemed unconstitutional, interpreted the ruling as a loss for racial preferences in admissions. "In the short term the case is a loss for the University of Texas and for supporters of racial preferences. The court has made clear that 'strict' means 'strict'."

Clegg, a former legal adviser to President Reagan, said it was "unfortunate" that the supreme court had failed to give a definitive take on the issue. "But this leaves the door open to a future comprehensive ruling and we will work to achieve that."